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Straits Times
39 minutes ago
- Business
- Straits Times
Local buyers are key to recovery of prime district condo market
Find out what's new on ST website and app. The strong weekend showing also comes after two years of tepid sales of new prime district condos, which plummeted to a record low of 46 units sold in the second quarter of 2025. SINGAPORE – When Malaysia's IOI Properties began pre-sales for its 683-unit, 99-year leasehold condo W Residences Marina View in Singapore's Central Business District on July 13, only two units were reportedly booked. It was a sign of how foreign buyers, deterred by hefty taxes on their property purchases, were still giving the luxury housing segment a miss. But just a week later, two new prime district condos, UpperHouse at Orchard Boulevard and The Robertson Opus in Unity Street – the only 999-year residential project launch in District 9 this year – collectively sold 303 units over their July 19 launch weekend. This is above the 253 new units sold in the third quarter of 2023 after foreign buyers were slapped with a 60 per cent additional buyer's stamp duty (ABSD) in April 2023. The strong weekend showing also comes after two years of tepid sales of new prime district condos, which plummeted to a record low of 46 units sold in the second quarter of 2025, according to PropNex. The dry spell afflicting prime district condos appears to be lifting, with UpperHouse and The Robertson Opus poised to boost prime district transactions to a two-year quarterly high in the third quarter this year. These units have become more appealing as the price gap between prime district condos and those in the city fringe has narrowed substantially. As a result, they offer better value to local buyers, who were primarily behind the weekend's strong showing at the two launches. The gap between the median price per square foot (psf) of new homes in the prime district and city fringe areas has narrowed from a high of 56.5 per cent in 2018 to a mere 1.9 per cent in the first half of 2025, Huttons Asia chief executive Mark Yip noted. Furthermore, the three-month compounded Singapore Overnight Rate Average, or Sora rates, have dipped below 2 per cent in July 2025, lowering borrowing costs, he added. An artist's illustration of The Robertson Opus in Unity Street. PHOTO: FRASERS PROPERTY, SEKISUI HOUSE As a result, more than 93 per cent of new non-landed private homes in the prime district in the first half of the year were bought by Singapore Permanent Residents and Singaporeans. PropNex chief executive Kelvin Fong noted that the average $3,350 psf price transacted at UpperHouse is among the most competitive prices for a luxury condo launch in the prime Orchard Road area. In comparison, the 54-unit freehold Park Nova luxury condo in Tomlinson Road recorded a median price of $4,979 psf when it first launched in May 2021. On a quantum basis, transacted prices of UpperHouse's one-bedders began at nearly $1.4 million, while two-bedders ranged from $2.1 million to $2.7 million. At The Robertson Opus, some 41 per cent of its 348 units were sold on July 20. The units fetched an average price of $3,360 psf. Transacted prices of its one-bedders (495 sq ft) ranged from $1.59 million to $1.67 million, while two-bedders (689 to 721 sq ft) sold for between $2.17 million and $2.63 million, according to PropNex. In comparison, W Residences – which will sit atop the 360-room five-star W Singapore hotel – said it is offering selected units at special preview prices starting from just above $3,20 0 psf. That means prices of the cheapest one-bedroom units (538 sq ft to 570 sq ft) start at above $1.8 million. When asked how it plans to boost demand, IOI Properties said on July 22 that 'interest has been encouraging, with units already reserved or under negotiation'. A spokesman added that further release plans will be evaluated when the preview ends. With several more prime district and centrally located projects expected to be launched in the coming months, developers may become more strategic in their marketing plans and pricing, ERA key executive officer Eugene Lim said. This can be seen in the starting prices for River Green in the prime district of River Valley, and the nearby city fringe condo Promenade Peak at Zion Road. River Green's starting price of $2,846 psf and Promenade Peak's starting price of $2,680 psf appear to be a sweet spot for buyers of centrally located new launches. Both projects, which will launch on Aug 2, saw robust demand during July previews. Two more centrally located condos could begin pre-sales in October: prime district project Skye at Holland, and Zyon Grand at Zion Road, a city fringe project. Whether the rebound in new prime district condo sales can be sustained will depend on the take-up rates of the upcoming prime district and centrally located new launches. Mr Nicholas Mak, chief research officer at said this also hinges on whether prices of the new prime district launches are within 'an acceptable price range' – which appears to be the lower end of the $3,000 psf range for 99 year-leasehold launches, and between $3,250 and $3,500 psf for freehold developments. With the hefty ABSD still in place for residential property purchases by foreign buyers, the only way to keep local buyers interested in prime district properties is to ensure that prices are accessible to them , especially in the face of growing economic uncertainty.
Straits Times
10-07-2025
- Business
- Straits Times
DBS joins UOB and OCBC with green home loan offering
Sign up now: Get ST's newsletters delivered to your inbox DBS said its rate is the most competitive green home loan in the market. SINGAPORE – DBS Bank has followed on the heels of UOB and OCBC Bank to offer green home loans for private property projects. Unlike the offerings from UOB and OCBC, which launched 'eco-mortages' in 2021, the DBS loan option is available only to borrowers with private properties under construction. These projects must have a Green Mark rating from the Building and Construction Authority (BCA) or be earmarked for one, DBS said on July 10. The promotional green home loan rate for a minimum mortgage of $1 million for the first year is pegged to the three-month compounded Singapore Overnight Rate Average, or Sora, plus a spread of 0.25 per cent. The spread is the profit the bank earns. This would mean that the first-year promotional rate for a $1 million mortgage is 2.2278 per cent, given prevailing rates. DBS said its rate is the most competitive green home loan in the market and is lower than the standard mortgage rates for new private residential launches. Mr Calvin Ong, head of the consumer banking group at DBS Singapore, said the competitive rates will hopefully incentivise customers to make environmentally conscious decisions when they buy a home. Mr Ang Kian Seng, group director of environmental sustainability at BCA, added that the DBS initiatives align with the Singapore Green Building Masterplan, which aims to green 80 per cent of buildings – by gross floor area – by 2030. Green Mark-certified buildings provide healthier indoor living environments while reducing energy costs, Mr Ang added. DBS is late to the green loan party, given that UOB and OCBC have been offering such mortgages since 2021. Mr Ong said the bank launched its loan offering once it had built up a robust pipeline of 'green' housing developments. It is financing 10 residential property projects in 2025 that are set to receive a Green Mark certification. These 10 properties make up 40 per cent of all the residential property launches in 2025, Mr Ong added. Home owners are eligible for a UOB green loan if their property is Green Mark certified. Unlike the DBS green home loan, which is only for private properties under construction, the UOB mortgage is available for completed private residential properties, with a minimum loan size of $250,000. The bank is offering a promotional rate of three-month compounded Sora, plus a spread of 0.7 per cent per annum – 0.45 percentage points higher than what DBS is offering. OCBC is the trailblazer in the space. Ms Maryanne Phua, its head of home loans, said the bank was the first to launch green home loans in 2021. Its product differs slightly from that of the other two banks. While DBS and UOB extend green loans for Green Mark-certified buildings, OCBC uses different criteria and requires prospective home owners to pass a BCA assessment. Home owners will be assessed on whether they are taking steps to furnish their home with environmentally friendly features. This can either be through home design, the use of energy-efficient appliances, and smart home features that regulate energy consumption. Ms Phua added that OCBC has promotional packages for both buildings under construction and completed properties. 'We have seen growing interest, and compared with 2021, the take-up of Eco-Care Home Loans increased sevenfold in 2024,' she said.
The Star
09-07-2025
- Business
- The Star
Trade spillover expected to impact RHB's lending
Kenanga Research said that slight top-ups on provisions may be expected from further developments surrounding trade policies. PETALING JAYA: Spillover effects from trade tariffs may weigh on RHB Bank Bhd's corporate lending activities, cautions Kenanga Research. This is despite the fact that RHB, which is 39.2%-owned by the Employees Provident Fund, has a minimal direct and indirect exposure to trade loans at below 2%. Kenanga Research said that slight top-ups on provisions may be expected from further developments surrounding trade policies. Nevertheless, RHB's loan loss coverage ratio of over 115% looks 'sufficient' to weather through near-term uncertainties. The group's mortgage segment (38% of the total loans) remains resilient and research house is anticipating continued growth on the back of stronger property sales in both primary and secondary markets. 'The group is also positioning to leverage the overall property development value chain, being present in both land and project financing,' it pointed out. It is noteworthy that RHB had revised its loan growth target for the financial year of 2025 (FY25) from 6% to 7% to 5% to 6%, citing weaker economic forecasts amid ongoing global trade uncertainties. 'Though the group took a more conservative view on the operating landscape in the recent results reporting, some relief could be found in encouraging loans growth in certain pockets with net interest margin (NIM) pressures looking to alleviate.' In the first quarter of FY25 (1Q25), RHB's NIM of 1.84% fell slightly behind its 1.86% to 1.90% target, no thanks to the decline in Singapore Overnight Rate Average (Sora) rates affecting its loan yields there (predominantly made up of variable rate loans). Sora is the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank Singapore dollar cash market in Singapore between 8am and 6.15pm. Kenanga Research noted that RHB expects NIMs to close well above 1.8% in the first half of FY25 as its fixed deposits in Singapore mature, allowing for repricing at lower rates and support margin recovery. Domestically, the group believes it may continue to be selective with its deposit acquisition strategies, thanks to the release of the statutory reserve requirement, which could improve their NIMs by one basis point. Kenanga Research has maintained its 'outperform' call on RHB and a target price of RM7.80 per share.
Business Times
20-06-2025
- Business
- Business Times
JPMorgan, Macquarie bet on S-Reits amid falling borrowing costs, MAS mandates
[SINGAPORE] Singapore-listed real estate investment trusts (S-Reits) could gain from falling interest rates, particularly those with a domestic focus, as well as The Monetary Authority of Singapore's (MAS) initiatives, reports from JPMorgan and Macquarie indicated. This comes as declines in various interest rates, such as the Singapore Overnight Rate Average (Sora) and treasury bills, have lowered borrowing costs, providing upsides for S-Reits, JPMorgan reported on Sunday (Jun 15). 'We believe this should generate upside for Singapore-focused Reits or stocks with resilient cashflows or leveraged balance sheets,' JPMorgan analysts said. Tariff risks, a weakened greenback, export front-loading, lowered commodity prices, capital inflows and monetary easing are among the factors that have spurred sharp falls in Singapore interest rates, they added. They pointed to Singapore-focused S-Reits with a larger share of Singapore dollar debt as prime beneficiaries of declines in Sora. With revenue growth, such S-Reits could get distribution per unit (DPU) improvements, the analysts said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up However, overseas-focused S-Reits or those more exposed to trade have clocked year-on-year declines in DPU with savings from Singdollar debt being offset by vacancies, foreign exchange headwinds and higher costs from refinancing low-priced overseas debt. A Macquarie Capital report dated Jun 16 also named some S-Reits, in addition to stocks, as potential winners from new MAS initiatives. Macquarie mentioned the central bank's Equity Market Development Programme that is set to channel S$5 billion to local fund managers, and other private capital to be injected into other mandates. Domestic-focused S-Reits win on lowered rates, borrowing costs CapitaLand Integrated Commercial Trust, CapitaLand Ascendas Reit (Clar), Keppel Data Centre Reit (KDCReit), Frasers Centrepoint Trust were among JPMorgan's top picks for S-Reits. Its top picks were Parkway Life Reit (PReit), Clar and KDCReit, which is set to join the Straits Times Index on Jun 23. Jayden Vantarakis, head of Asean Equity Research at Macquarie Capital, highlighted that PReit as a possible beneficiary. It has had an 'impeccable track record of steady growth since (its) initial public offering without raising funds' while facing limited downside risks, he said. Vantarakis said: 'We expect a rare quantum leap of PReit's Singapore rental growth in FY2026 once enhancements to Mount Elizabeth Orchard Hospital are completed.' Bank profits may suffer but fund inflows stay strong Broad monetary easing poses a 'significant headwind' for Singapore banks' profitability as it could lower net interest margin (NIM), JPMorgan said. The investment banking group foresees a 12 basis point year-on-year compression in NIM for 2025, with another 10 basis points for 2026. However, lowered rates have also accelerated flows into Singapore-dedicated funds over the past 12 months, mitigating the blow. Given this, JPMorgan analysts remained neutral on the sector. 'While banks will bear the brunt of lower interest rates, we believe the sector could still be supported by resilient yields and strong inflows from domestic funds subscriptions,' they said. MAS' S$5 billion inflow to give small- to mid- caps a short-run boost The S$5 billion inflow from the Monetary Authority of Singapore's Equity Market Development Programme could lead small- to mid- cap stocks to outperform in the short-run, JPMorgan said. As part of Singapore's equity market reform, the scheme aims to channel S$5 billion to fund managers focused on Singapore listed equities and to broaden investor participation beyond large-cap stocks. It prioritises funds with a higher weighting in small- to mid- cap stocks. However, a 'significant outperformance' over large cap stocks is unlikely, given higher multiples, uncertain profitability and lower liquidity and growth of such stocks. 'In our view, stocks with a good track record of earnings growth and quality balance sheets would attract additional flows,' JPMorgan analysts said. Quality mid-cap stocks and those with upside potential from asset recycling stand to be key beneficiaries, the investment banking group added.
Straits Times
03-06-2025
- Business
- Straits Times
Interest in floating loans in S'pore picking up amid falling rates, say mortgage brokers
Interest in floating loans in S'pore picking up amid falling rates, say mortgage brokers SINGAPORE – More home owners are considering floating rate mortgages as the benchmark rate for such loans in Singapore continues to fall, say mortgage brokers. The uptick is not across the board, however, as many people are still keen on fixed rate loans for greater financial certainty, they told The Straits Times. Mr Clive Chng of Redbrick Mortgage Advisory said that in the past, nearly all his clients chose fixed-rate loans. Now , he estimated that one out of every 10 clients are open to consider floating-rate packages. Similarly, chief executive of Mortgage Master David Baey said about 40 per cent of his clients now go for floating-rate packages, up from 5 per cent last month. Redbrick and Mortgage Master are among the larger mortgage advisory firms in Singapore. Over the past three years, when interest rates were high, it was a clear-cut decision to take a fixed-rate home loan to lock in the loan rates a home owner has to pay. Now, as interest rates creep lower, the conversation of whether to take variable rates or fixed rates has resurfaced again. The Singapore Overnight Rate Average (Sora), which is used for floating-rate home loans, has been falling since it hit the 3.6 per cent to 3.7 per cent range in late 2023. The rate slipped further to the 3.4 per cent to 3.5 per cent range on September 18, 2024, after the US Federal Reserve started on its rate cut cycle. Sora rates were between 2.2 per cent and 2.3 per cent as at June 2, a drop of at least 1.2 percentage points. That represents a bigger decline than US interest rates which have come down by 1 percentage point since September 18, 2024. Unlike fixed-rate packages, the interest rates on floating-rate loans vary according to whether they are pegged to the one-month compounded Sora (1M Sora) or the three-month compounded Sora (3M Sora). Banks typically charge the Sora rate plus a spread, which is the profit the bank earns. So when Sora rates fall, the overall interest rate on the home loan falls as well. Sora rates here have also dropped more compared with historical levels. Ms Karen Wu, senior analyst of financials at credit research firm CreditSights, said the 3M Sora historically drops by 0.5 to 0.6 percentage points when US rates fall by 1 percentage point. In this instance, Sora has already dropped by 1.2 percentage points. Mr Sani Hamid, director of wealth management at Financial Alliance, said that the steady decline in the Sora rates suggests that interest rates may have already reached their cyclical highs. Mr Sani added that the Monetary Authority of Singapore (MAS) and other global central banks are now more focused on supporting their economies instead of reining in inflation as inflationary pressures and growth expectations moderate. What all this means is that interest rates should go lower from here. That is why Mr David Baey, chief executive of Mortgage Master, said this is an opportune time to consider floating-rate packages. Mr Baey, who also switched to a floating-rate package for his own property, said that home owners can consider taking a Sora package today because the spread – or the extra interest that the bank charges – is still relatively low. Currently, the spreads go as low as 0.28 per cent, according to what ST has learnt. If home owners wait until Sora drops further before they look at a floating-rate package, they will likely get 'normal spreads of 0.8 per cent', Mr Baey added. That said, a dose of caution may still be needed as there are concerns about the global economic outlook. That is perhaps why many home owners, such as Mr Eugene Tay, 36, still prefer fixed rate loans because their monthly payments remain the same throughout and they know how much they have to pay each month. The associate senior district director with real estate firm Huttons was paying as much as $4,648 a month for his mortgage payments in December 2024, after the interest rates on his floating-rate package reached around 4.44 per cent. The interest rates on his home loan have since dropped, but Mr Tay said his monthly instalments are still in the $4,000 range. He noted that trade tensions and geopolitical conflicts, such as that between Israel and the Palestinians, add to the economic uncertainties. This prompted him to take up another loan package with his bank OCBC in April; his lock-in period had ended, so Mr Tay was eligible for a new package. He chose a two-year fixed-rate package at 2.48 per cent a year and his monthly instalments will come down to $3,736 from July. Mr Tay said the rental income of $4,000 a month that he gets from his property will cover his monthly instalments. 'This will reduce my monthly financial obligations, which helps with my cash flow,' he added. Fixed-rate home loan packages hit a high of 4.5 per cent a year in November 2022 but have now come down to the 2 per cent range. The Straits Times understands that the lowest rate in the market for a two-year fixed-rate package is 2.3 per cent, while for a three-year fixed-rate package, it is 2.4 per cent. The rates apply for a loan of $1.5 million. Mr Chng said there are fixed-rate packages from foreign banks such as HSBC, Standard Chartered Bank, Maybank and Bank of China, which allow home owners a free conversion to another loan package after one year. These packages allow the best of both worlds – the certainty of interest rates that a fixed-rate package affords and the option to capture lower floating rates if they want to. For example, DBS has a fixed rate package – the DBS Easy Switch Loan – that gives home owners the flexibility to convert it into a variable rate package at a pre-determined spread of 0.35 per cent. The three-year package has a fixed rate of 2.5 per cent a year, and borrowers can switch to a Sora package anytime after loan disbursement. Mr Chng said that if home owners go into a fixed-rate package now and try to reprice later, they might not get a variable interest rate package with a low spread. This is because the banks will start raising their spreads again when Sora rates start coming down. Most clients are willing to give up the low spread because they really do not know what is going to happen, he added. Join ST's Telegram channel and get the latest breaking news delivered to you.
